Health Management Programs
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Breaking Barriers to Value

The Cost of Chronic Diseases

Chronic diseases cost your company. In 2003:

  • Over 100 million people in the US reported having at least 1 of 7 common chronic diseases costing over $1.3 trillion.
  • Primary treatment for these chronic diseases cost $277 billion (excludes the costs of comorbidities and the costs of people in nursing homes and other institutions).
  • The estimated impact of lost workdays and reduced employee productivity cost the United States economy over $1 trillion.1

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In 2003, an estimated 69 million Americans took sick days. This cost employers:

  • 407 million lost workdays.
  • $48 billion in wages paid for time not worked due to illness.2

Emerging data suggest that presenteeism:

  • Reduces individual productivity by a third or more.
  • Cost Bank One $312 million in 1 year.2


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It pays to keep your employees healthy.

Shifting Costs to Employees Can Cost You

The cost of employee healthcare is overwhelming:

  • U.S. healthcare costs doubled from 1990 to 2001 and are projected to double again by 2012.3
  • The American work force is aging. The prevalence of chronic health conditions is increasing.4
  • Between now and 2010, the fastest-growing segment of workers will be those aged 55 to 64.5
  • Chronic conditions account for 78% of healthcare spending. This spending is projected to increase significantly over the next 30 years.4

Employers are shifting their healthcare cost burden to employees through rising:

This strategy is especially evident in pharmacy benefit plan designs. Multi-tier formulary plans and graduated copayments or coinsurance are becoming the norm.7

Economic barriers such as high copays may impair adherence to treatment, increase complications of disease, and further increase healthcare costs.8-10 For example:

  • As copayments doubled, the use of prescription drugs for common conditions such as diabetes fell 23% and asthma fell 22%.8
  • One plan switched to a 3-tier formulary and simultaneously increased all copayments. A significant number of enrollees discontinued medication use. Another employer group went to a 3-tier formulary with no increase in cost sharing. There was little effect on discontinuation of
    medications.9
  • Copayments doubled for cholesterol-lowering therapies. Patients’ full compliance fell by 6 to 10%.10
  • Barriers to primary prevention practices such as preventive screenings and immunizations can further compromise the effectiveness and investment in employee health programs.

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Shifting from Cost to Total Value

It is time to focus on the value of employee health benefits as a business investment rather than a cost of doing business. Companies are challenged to:

Learn more. Request a free copy of Total Value, Total Return™. Contact the GlaxoSmithKline Response Center at 1-888-825-5249.

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References:

  1. Milken Institute. An unhealthy America: the economic burden of chronic disease. Santa Monica, CA: Milken Institute, 2007. Report available at www.milkeninstitute.org. Accessed November 14, 2007.
  2. American Heart Association. Healthy people are the foundation for a productive America. TrendWatch Report. Washington, DC: AHA, 2007. Available at http://www.hospitalconnect.com/ahapolicyforum/trendwatch/content/
    TW706SinglesFINALTOWEB.pdf. Accessed November 14, 2007.
  3. Mulheron J. NGA Center for Best Practices. Issue Brief: Creating Healthy States: Building Healthy Worksites. Washington, DC. February 25, 2006.
  4. Anderson G, Horvath J. The growing burden of chronic disease in America. Public Health Reports. 2004;119:263-270.
  5. Purcell PJ. Older workers: employment and retirement trends. Monthly Labor Review. 2000;10:19-30.
  6. Robinson J. Renewed emphasis on consumer cost sharing in health insurance benefit design. Health Affairs. 2002;3:W139-W154. http://healthaff.highwire.org/cgi/content/full/hlthaff.w2.139v1/DC1. Last accessed 8/21/07.
  7. Malkin JD, Goldman DP, Joyce GF. The changing face of pharmacy benefit design. Health Affairs. 2004;23(1):194-199.
  8. Goldman DP, Joyce GF, Escarce JJ, et al. Pharmacy benefits and the use of drugs by the chronically ill. JAMA. 2004;291:2344–2349.
  9. Huskamp HA, Deverka PA, Epstein AM, et al. The effect of incentive-based formularies on prescription-drug utilization and spending. N Engl J Med. 2003; 349(23): 2224-2232.
  10. Goldman DP, Joyce GF, Karaca-Mandic P. Varying pharmacy benefits with clinical status: the case of cholesterol-lowering therapy. Am J Manag Care. 2006;12(1):21-28.
  11. Mahoney J, Hom D. Total Value, Total Return: Seven Rules for Optimizing Employee Health Benefits for a Healthier and More Productive Work force. Philadelphia, PA: GlaxoSmithKline, 2006.